A businesswoman who blew the whistle on suspicious fraudulent activities at engineering company NJM Heat -Treatment and NDE Services has now lodged a formal complaint with the Independent Regulatory Board for Auditors (IRBA) against her company’s auditors.
Baleseng Zinyana approached IRBA to investigate the auditors of NJM for allegedly committing fraud by manipulating the company’s books.
This came after she learned from media reports that the company had been involved in fraudulent activities with the assistance of its auditors, Eugene Symonds CA(SA).
In the complaint, leaked to Sunday World by insiders at IRBA, Zinyana stated that she had acquired 26% of the engineering company’s shares, which she paid for in cash in 2014.
In her complaint, Zinyana said she reviewed NJM’s financial statements for the year ended February 29, 2019, and she flagged some activities that she deemed fraudulent.
She said in her complaint that when she raised her concerns, the board of the company resolved in November 2019 to appoint Eugene Symonds CA (SA) as an auditor to perform the audit for the 2018-2019 year as well as the years to follow.
“Eugene Symonds CA(SA) audited and submitted the financial statements for the year ended 29 February 2020, which were signed and approved on 9 October 2020 although no annual general meeting was held for the year yet.
“Although I am still currently a shareholder, I was not involved in the approval of the financial statements and or any discussion on the management report on any formal meeting,” reads the complaint in part.
Zinyana stated in her complaint that when she reviewed financial statements, she picked up errors of misrepresentation.
She stated that the audit report was not the latest version to be used for the year ending after December 15, 2016.
The comparative figures disclosed, said Zinyana, differ from the signed reviewed financial statements for the year ended February 28, 2019, that were signed and approved on October 4, 2019.
In addition, she said, the turnover was reduced from the management accounts received and presented by the financial director to the board to the
financial statements reviewed and or audited for the year ended February 28, 2019.
Zinyana further alleged that the turnover for the year ended February 28, 2019 was reduced from over R68-million to just R49-million. The businesswoman said the R49-million was also decreased to R44-million on the comparatives amounts on the
financial statements for the year ended February 29, 2020.
Zinyana also said in her complaint that the profit for the year ended February 28, 2019 was reduced from R5 656 710 to R656 393 before taxation.
“The profit was reduced from management accounts received and presented by the financial director to the board to the financial statements reviewed and or audited for the year ended 29 February 2020.
“The profit for the year ended 29 February 2020 reduced from R16 107 547 as per the management accounts to R3 878 043 before taxation on the financial statements for the year ended February 29, 2020,” reads the complaint.
“I believe the financial statements for the year ended 28 February 2019 as well as for year ended 29 February 2020 is (sic) not a true and fair reflection on the financial performance and or position of the company and that the audit report issued is incorrect,” reads the complaint.
Last week Sunday World reported that the company’s directors Mark Douglas Smith, Alexander Elias Roditis, Vanessa Chungu, Raymond Crozier, Guy Phillip le Roux and Ronald James Hoy were arrested for fraud and appeared in court.
These arrests stemmed from extensive investigations into fraudulent activities involving NJM and other entities such as Dasmar Engineering and Thermo Jet. The NJM bosses are facing face charges of fraud, theft, and money laundering.
Sunday World has learned that IRBA has found the auditors Eugene Symonds CA(SA) guilty of not following accounting processes and that they had to pay fines. The owner of Eugene Symonds CA (SA), Eugene Symonds said that he was not auditor during 2018 – 2019.
“I was only appointed as auditor from 2020 and prior to this I did not perform any accounting or other functions for NJM. I can confirm that for the 2020 financial year, proper due diligence and audit work was undertaken on the accounts of NJM.”
IRBA spokesperson Lorraine Van Schalkwyk confirmed that the regulatory body received a complaint from Zinyana regarding improper conduct by the auditor of NJM.
“The matter was concluded and Ms Zinyana was advised of the outcome,” said Van Schalkwyk.
